India and EU Sign MoU on Semiconductor Supply Chains Under TTC Framework

India and the European Union (EU) have signed a Memorandum of Understanding (MoU) on semiconductor supply chains under the Trade and Technology Council (TTC) framework.

The agreement aims to promote collaboration, information sharing, and joint ventures between the two parties to boost resilience and reduce reliance on imports. This aligns with India's National Policy on Electronics and minilateral initiatives like the Supply Chain Resilience Initiative (SCRI), Indo-Pacific Economic Framework (IPEF), and the Quad for Indo-Pacific supply-chain sustainability and economic security in the post-pandemic era.

The MoU will enable cooperation in areas such as research and development, skill development, and investment promotion to strengthen semiconductor supply chains and reduce dependence on imports. It is anticipated to facilitate the exchange of best practices, joint research and development, and the establishment of joint ventures to strengthen the semiconductor supply chain between India and the EU.

The Indian government has approved the establishment of semiconductor units as part of the Development of Semiconductors and Display Manufacturing Ecosystems in India policy, with a total outlay of Rs 76,000 crore. This policy aims to make India self-reliant and position it as a global hub for electronic system design and manufacturing.

The government is providing financial support of 50% of the project cost to incentivize the setting up of semiconductor fabs, display fabs, and facilities for compound semiconductors, silicon photonics, sensors, and assembly and testing. Several projects, including those by Tata, Micron, and CG Power, are already underway as part of this policy.

Why this matters: The agreement comes as global chipmakers look to diversify their operations amid geopolitical uncertainty, and India aims to become a major chip hub to compete against the U.S., Taiwan, and South Korea. India has announced billions of dollars worth of production-linked incentives to attract investment in key areas and cutting-edge technology, with the goal of being one of the top five semiconductor manufacturers globally in the next five years.

Qualcomm, a leading chip designer, already has a significant presence in India, with engineers designing chips end-to-end in the country and shipping them globally. The MoU between India and the EU is a significant step towards strengthening semiconductor supply chains and reducing dependence on imports, aligning with India's National Policy on Electronics and various minilateral initiatives for Indo-Pacific supply-chain sustainability and economic security in the post-pandemic era.

Key Takeaways

• India and EU signed MoU to boost semiconductor supply chain resilience and reduce imports.
• MoU aims to enable cooperation in R&D, skill dev, and investment to strengthen semiconductor supply.
• India approved $10B policy to establish semiconductor units and position as global electronics hub.
• India aims to be a top 5 global semiconductor manufacturer in 5 years with production incentives.
• Qualcomm has significant chip design presence in India, aligning with India's electronics policy goals.